Appeals court revives most of Versata’s $104.6 million Ford verdict

A federal appeals court restored most of a $104.6 million verdict that Versata Software won against Ford Motor Company, reviving a fight that reaches far beyond one licensing dispute and into the growing business value of automotive software. The U.S. Court of Appeals for the Federal Circuit on Friday reinstated the jury’s breach-of-contract award, vacated the district court’s ruling on trade-secret damages and sent that issue back for a new trial, keeping alive the core finding that Ford had exposed itself to liability over code used in vehicle configuration and assembly.

The ruling reverses much of the damage done by U.S. District Court Judge Matthew F. Leitman’s May 1, 2023 decision in the U.S. District Court for the Eastern District of Michigan, when he cut the jury’s roughly $82.3 million contract award to $3 in nominal damages and wiped out the jury’s roughly $22.4 million trade-secret award. The Federal Circuit held that the contract damages should stand and that Ford had not won judgment as a matter of law on trade-secret liability, a result that could push the automaker back into another damages phase and add to a dispute that has already stretched more than seven years.

At the center of the case was a 2004 Master Subscription and Services Agreement, under which Ford licensed Versata’s Automotive Configuration Manager, or ACM, and later Materials Cost Analytics, or MCA. Versata said Ford used its software to help manage vehicle configuration, then continued building around that technology as the agreement expired in 2014. Ford later released its own replacement software, PDO, while still relying on the licensed tools, setting up the argument that the company had both breached its contract and benefited from proprietary know-how it did not independently develop.

The revived verdict matters because it shows how licensing fights can become existential as automobiles turn into software-defined products. When a carmaker embeds third-party code into design, engineering and manufacturing systems, the value of that code is not limited to a line item on a contract. It can shape how quickly a company brings vehicles to market, how much it spends to duplicate a system on its own and how exposed it becomes if a court decides it crossed from licensed use into misappropriation. The Federal Circuit’s decision suggests those stakes will only grow as legacy manufacturers lean harder on software they did not write themselves.